It is possible to legally reduce a tax bill by using rebates and allowances, but many are not widely utilised. At Everfair Tax we specialise in maximising all available avenues and here is a selection: Tax on savings interest
The Personal Savings Allowance for basic rate taxpayers allows £1,000 of interest to be received from savings tax free. For higher rate taxpayers, the threshold is £500, in addition to another £20,000 in tax-free ISAs.Share dividend income
The first £2,000 received in share dividends is tax free. However, income over £2,000 incurs a 7.5% tax for basic rate taxpayers and 32.5% for higher rate taxpayers. Marriage allowance
£1,190 may be transferred between partners if one is not paying income tax and fully using their personal allowance. This is worth £238 a year and the claim may also be backdated to the previous year. It is only applicable if one partner earns £11,850 to £46,350. Savings and assets may also be transferred to a partner to maximise the use of their personal tax allowance.Claim tax back on charitable donations
A higher rate taxpayer may claim back additional tax paid on gift-aided charitable donations.
Renting a room?
If you rent or let a room, your income is tax free up to £7,500 (before costs are deducted) under the Rent a Room scheme.Mileage allowance
As a member of staff, if using your vehicle for company purposes and are paid less than 45p per mile, you may claim back the difference. After the first 10,000 miles, you may then claim at 25p per mile.Do you have a self-employed income?
Before self-employed income earnings are declared, all reasonable costs should be deducted first. And, if you work from home, you can also claim a proportion of the running costs. Check your tax code is correct
All PAYE employees have a tax code that details the allowances and deductions used to calculate their tax bill. You should always ensure that this is correct. Auction sites
Income gained through buying and selling on auction sites does not need to be declared up to £1,000 as it comes under the trading allowance. Remember every bank account
When you complete your tax return, it is important to include every bank account and the interest earned from each.
If you would like more information on how to reduce your tax bill, please call our experienced team at Everfair Tax and we will be happy to assist.